What To Do If Your Mortgage Is Declined By An Underwriter

Underwriting is an important part of the mortgage process, as lenders need to cross-check applications to determine the amount of risk they’re taking on.

Some applications pass these assessments just fine, while others are declined even though the lender granted an agreement in principle.

If this has happened to you, you probably feel stressed and frustrated, but don’t assume that mortgage approval is impossible. Read through our guide to find out how to get things back on track.

What to do if a mortgage underwriter has refused your application

First, know you’re not alone and could still have fallback options. Underwriters decline countless people, and many of them go on to get the mortgage they need – with our help and advice from the right broker, you could well become one of them.

If you’ve had a mortgage declined in underwriting, here are the steps to take…

1. Don’t re-apply just yet: There could be a way to salvage your mortgage plans, but don’t go racing out to another lender just yet. There’s no guarantee you won’t be rejected all over again, and another failed request for finance could negatively affect your credit report and set your homeownership dreams further back.
2. Get professional advice: The best way to keep your plans alive is to seek advice from a mortgage broker specialising in helping customers who an underwriter has declined. They will be able to lay out all of your options for you, including ways to potentially revive your application with your current mortgage lender.
3. Let us take things from here: You deserve a break and a breather if you’ve made it as far as underwriting, only to have your application stall. If you use our broker-matching service, you won’t have to lift a finger while we pair you with a mortgage advisor who helps customers who’ve been declined in underwriting.

Your mortgage broker will provide the following services…

• Explore whether there are grounds for appeal against the underwriter’s decision and take the lead on any renegotiations with them
• Establish whether there are workaround solutions to revive your plans with your current mortgage lender. These might include putting down extra deposit (if you’re in a position to), optimising your credit report or challenging the underwriter’s decision
• Search the market to see whether there’s a mortgage lender offering a better deal
• Offer you bespoke advice on which option to choose
• Help you with any paperwork you still need to complete

How to find out why your mortgage was declined

Before taking any action, it’s crucial to understand exactly why your mortgage application was rejected. Knowing the reason will help you address any issues and increase your chances of approval when reapplying.

Steps to identify why your mortgage was declined

• Check the lender’s rejection letter: Most lenders will send a letter or email outlining the main reason your mortgage was declined. This could be due to affordability, credit history, paperwork errors, or other risk factors.
• Request a copy of your credit report: Mortgage lenders conduct a full credit check during underwriting. If your rejection was due to bad credit, you should check your report for:
  • Missed or late payments
  • Defaults, CCJs, or bankruptcies
  • High credit usage or recent hard searches
  • Incorrect or outdated information
• Speak directly with the lender: If your rejection letter is unclear, call your lender and ask them to explain:
  • Why your application was declined
  • Whether the issue can be resolved (e.g., providing extra documents)
  • If they’d consider approving you with a higher deposit or a different loan amount
• Consult with a mortgage broker: A specialist mortgage broker can:
  • Review your rejection reason and check for errors or inconsistencies
  • Identify lenders with more flexible criteria based on your financial situation
  • Help appeal the decision or suggest the best next steps

Need help after being declined? Speak to a mortgage expert today!

Reasons underwriters reject mortgages

Mortgage underwriters can reject applications for the following reasons…

• Bad credit: Mortgage lenders often conduct a soft credit search before offering an agreement in principle, but underwriters take a deeper look at your credit history, and any bad credit still on your file is less likely to go undetected. If the issues they find are deemed too high risk, your application might be declined.
• Your circumstances have changed: You may have been offered a mortgage based on previous circumstances during the AIP stage, but underwriters will pick up on any changes to your affordability or credit report that have occurred since. You might find your mortgage is declined if things have changed too much for their liking.
• They suspect fraud: If an underwriter has reason to think there’s something dodgy about your mortgage application, they can decline you on the grounds of suspected fraud. You may be innocent of doing anything untoward, but conflicting or false information on your paperwork might make the underwriter think otherwise.
• An error on your paperwork: One of the many reasons people use a mortgage broker is that they can help you ensure your paperwork is completed and filed correctly. A simple mistake on your documentation, however small, might be picked up during underwriting and cause the application to stall.
• The mortgage is unaffordable: Underwriters double-check mortgage applications to assess the level of risk. It’s not uncommon for fine details about an applicant’s income and outgoings to slip through the net during AIP, only for the underwriter to take them on board in their assessment and tell the lender to think twice.

The mortgage brokers we work with can help you overcome these issues by matching you with a lender whose underwriting department has more flexible criteria, a higher appetite for risk and a more generous stance on affordability.

They will even help you with your paperwork so you can quickly get your application back on course, and rest assured it will be error-free.

Customer success stories

“We were offered an agreement in principle before covid hit but were forced to take small pay cuts during the pandemic. I was certain we could still afford the mortgage we were applying for, but the bank’s underwriter obviously thought differently.

“The prospect of having to move back in with my parents was hanging over me by this point, but we were offered a lifeline when we found Online Mortgage Advisor. They matched us with Peter, a broker we instantly had a good rapport with.

“Peter put our minds at ease by assuring us that our rejection was just a bump in the road. He soon found us another lender who approved us based on five times income. We were due a bit of fortune, and thanks to Online Mortgage Advisor, things went smoothly from here.”

Maria and Wes, Doncaster

“I thought my old CCJ was no obstacle as far as my mortgage application was concerned, especially when my lender seemed to turn a blind eye to it during the AIP.

“I was in for a shock when my application went to underwriting and I was told that my CCJ was, in fact, a problem. The lender withdrew my application, and this put the fear of God in me, since I couldn’t imagine finding a better home than the one I was in talks to buy.

“I read a few helpful articles on Online Mortgage Advisor’s website while looking for a solution and decided to give them a try. I’m glad I did since Iris, the broker they matched me with, really saved the day. She had lender contacts who were more than happy to offer bad credit mortgages and got me approved by an alternative bank almost immediately.”

Francoise, Bolton

How long should you wait before reapplying?

After a mortgage rejection, it’s important not to rush into another application. A second rejection could further damage your credit score and reduce your chances of getting approved.

How long should you wait?

• Immediately: If your rejection was due to a simple paperwork error, you may be able to correct it and resubmit your application straight away.
• 3-6 months: If the issue was related to affordability, credit score, or deposit size, take time to:
  • Improve your credit score (e.g., reduce debts, avoid new credit applications)
  • Increase your deposit (a larger deposit can improve approval chances)
  • Stabilise your finances (lenders prefer applicants with a consistent income).
• 12+ months: If you have serious credit issues (e.g., defaults, CCJs, or bankruptcy), it may take a year or longer to rebuild your financial profile before reapplying.

Why waiting is important

• Prevents multiple hard credit checks from lowering your score further
• Gives you time to fix financial weaknesses that led to the rejection
• Ensures your next application is stronger and less likely to be declined

A mortgage broker can assess your situation and recommend when and where to reapply to maximise your approval chances.

What to do if a specific lender’s underwriter has declined you

The brokers we work with can help you regardless of which mortgage lender’s underwriting team declined you. But we have standalone guides for people who have been declined by a specific lender that you might want to read before making an enquiry…

Call 0330 818 7026 or make an enquiry with us, and we’ll set up a free, no-obligation chat between you and a broker who can help you revive your mortgage application today.